5.  The applicant was born in 1956 and lives in Salzburg.
6.  The case concerns criminal charges against the applicant and other persons for participating in a so-called “carousel fraud” scheme. Such a scheme, in which at least three seemingly unconnected undertakings in different countries cooperate to defraud the exchequer, entails selling cheap products at an artificially high price to a domestic trader. The seller charges turnover tax on the price and would normally have to pay the tax to the exchequer. The trader would then export the goods. Since export sales are exempt from turnover tax, the trader could claim reimbursement of the turnover tax he had paid to the seller. However, the seller had never paid the tax to the exchequer, and – in cases where the scheme is successful – the trader receives reimbursement, and the seller receives turnover tax he has not paid to the exchequer. The foreign buyer often sends the cheap products back to the seller and a new circle begins, hence the name “carousel fraud”.
7.  The applicant was exporting goods to countries outside the EU and used a limited liability company (Mirabell Bequemschuh & Beautytrend Versandgesellschaft m.b.H, hereinafter “MV”) for the transactions. Apparently the applicant’s brother was the chief executive of MV and the applicant had authority to act on MV’s behalf. The applicant had started the transactions after being contacted by Mr W.R., an Austrian residing in Brazil, in April 1993. The applicant at first exported royal bee jelly to Brazil; later on he exported computer software parts, filtering devices and electrodes. He quit these transactions in spring 1994 and continued trading in perfume oils. His last transactions were carried out in August 1995.
8.  The first tax examination with regard to turnover tax was carried out by the Salzburg City Tax Authority (Finanzamt Salzburg-Stadt) in November 1993; according to the applicant, no irregularities were detected by the authority.
9.  In February and March 1994, the Salzburg City Tax Authority carried out another examination of the company’s turnover tax conduct and decided to extend its examination to the entire company (MV); the officials told the applicant that some irregularities regarding turnover tax with MV’s suppliers had occurred.
10.  On 18 May 1995 and 22 May 1995 the Corporate Tax Authority (Finanzamt für Körperschaften) submitted a statement of facts to the Public Prosecutor’s Office in Vienna concerning suspicion of tax fraud committed by eight persons. Apparently the applicant was not among these eight suspects. On 23 May 1995 the Regional Criminal Court authorised the Corporate Tax Authority to investigate.
11.  On 16 August 1995 a search warrant for MV was issued – it appears that since the company had moved to another address, on the same day the Tax Authority applied for further search warrants for MV. The searches were carried out on 16 and 17 August 1995.
12.  On 23 August 1995 the applicant was questioned as a suspect by the Tax Authority about his business and sales of low-grade products.
13.  Apparently, in the meantime the Tax Authority had seized perfume oils at Mr W.R.’s mother’s house; an expert was asked to carry out a chemical analysis of samples of the perfume oil and to give an expert opinion on the quality and the value of the oils.
14.  The applicant was questioned again on 7 September 1995 and on 13 October 1995. Another search of storage rooms and offices of MV and the applicant took place on 19 September 1995.
15.  On 9 February 1996 the expert delivered his opinion about the quality of the perfume oils. He stated that most of the oils were of low quality, while some samples were of slightly higher quality.
16.  On 19 November 1996 MV, represented by the applicant, applied for access to the Salzburg Tax Authority file in connection with pending appeal proceedings. On 20 November 1996 the request was rejected, as there were no appeal proceedings pending since the appeal had been submitted out of time. On 18 March 1997 MV, represented by counsel, applied for access to the file of the Salzburg Tax Authority. On 3 April 1997 the file was inspected on behalf of MV and 113 copies of documents were made.
17.  On 27 February 1997 the applicant’s counsel applied to have the file concerning the criminal proceedings transmitted to the Salzburg District Court (Bezirksgericht) to be inspected there. The request was not complied with.
18.  By a letter dated 28 May 1997 the Tax Authority sent information on tax evasion (Abgabenhinterziehung) and forgery of protected documents (Fälschung besonders geschützter Urkunden) concerning several suspects, including the applicant, to the Regional Criminal Court; apparently the charges of forgery did not affect the applicant.
19.  On 17 August 1998 the applicant’s counsel had applied for access to the criminal court file. By a letter of 19 August 1998 the Vienna Regional Criminal Court informed the applicant’s counsel that the file had been with the Vienna Public Prosecutor since 14 July 1997.
20.  After the final statements of facts had been supplemented in September 1999 by the Tax Authority, the Public Prosecutor ordered investigations on 15 November 1999. The statement of facts was then supplemented twice, on 24 November and 28 December 1999.
21.  On 3 March 2000 the Public Prosecutor issued an indictment against the applicant and eighteen others on suspicion of several counts of tax evasion, fraud, money laundering and of forming a criminal organisation. The indictment was served on the applicant’s counsel at some point after 18 April 2000.
22.  Four persons accused in the indictment lodged complaints against the indictment in May and early June 2000; their complaints were rejected by the Vienna Regional Criminal Court on 1 December 2000. Two further persons accused in the indictment lodged complaints in April 2001. Their complaints were rejected by the Vienna Regional Criminal Court on 25 June 2001. The indictment, at that point having been served on all accused persons and after all their complaints had been dealt with, became final.
23.  On 7 September 2001 the Vienna Regional Criminal Court set the date for the trial for 12 November 2001.
24.  On 1 October 2001 the applicant’s counsel notified the court of his power of attorney and was given permission to inspect the file. On 2 October 2001 the applicant’s counsel inspected the file.
25.  On 16 October 2001 applicant’s counsel submitted a statement and a request to take evidence and for further witnesses to be heard. Among these witnesses were the lawyer, an accountant and a bank director who had advised the applicant on several aspects of the first transactions.
26.  The first hearing was held on 12 November 2001 before the Vienna Regional Criminal Court sitting with two professional and two lay judges; in total the hearings took thirty-five days, spread over almost one year. The court heard several experts and numerous witnesses as well as the investigators from the Tax Authorities as witnesses.
27.  The applicant revoked the power of attorney for his defence lawyer on 16 September 2002. The court was notified of this the following day. Subsequently the applicant was granted legal aid and from 18 September 2002 onward the applicant was represented by legal aid counsel.
28.  On 20 September 2002 the verdict was pronounced, and the applicant was found guilty of fraud and attempted fraud, evasion of taxes and participation in a criminal organisation. He was sentenced to two years’ imprisonment and a fine of 400,000 euros (EUR) with six months’ imprisonment in default. The court found as mitigating circumstances that the applicant had no previous criminal record and parts of his acts had been attempts; another mitigating circumstance was the lapse of time since the commission of the offences. The court found as aggravating circumstances that the applicant committed several crimes, was a leading figure in the crimes and had committed a crime causing a high degree of damage (such as aggravated fraud) and on a professional basis.
29.  The court held that from May 1993 to August 1995 the applicant had exported various counterfeit products or products of low quality at a high price and knowingly participated in a so-called “carousel fraud”, at first as an exporter of the goods, later on as an intermediary trader. The applicant was found guilty of recruiting other unsuspecting companies to export goods and thus to participate in the carousel fraud; when turnover tax was no longer reimbursed, the companies sustained damage amounting to the turnover tax they had paid to the seller of the goods. By integrating these companies into the scheme, the companies were also induced to unknowingly submit false turnover tax reimbursement claims. The applicant was also found guilty of tax evasion, as he had not declared turnover tax for the transactions where he had acted as an intermediary.
30.  As regards the application to hear further witnesses, the court held that it was not necessary to hear further witnesses, as the evidence established by documents and the witnesses’ and accused persons’ statements was sufficient to establish the accused persons’ guilt. Hearing W.R., who was fleeing from prosecution and thus could not be heard for practical reasons, could not change the assessment of the evidence the court already had at its disposal.
31.  The applicant stated he intended to appeal and lodge a plea of nullity to the Supreme Court. The first-instance judgment, consisting of more than 450 pages, was served on the applicant’s counsel on 29 October 2003.
32.  The applicant’s counsel applied for an extension of the period to lodge the remedies, which was granted. The plea of nullity and the appeal were lodged on 25 January 2004.
33.  The Supreme Court issued a first verdict on 3 March 2005, in which it rejected the applicant’s plea of nullity. It held that the applicant’s complaint that the Regional Criminal Court had refused to take further evidence was ill-founded, since the applications had not been made in accordance with the relevant provisions of the Code of Criminal Procedure.
34.  The Supreme Court adjudicated the applicant’s and the public prosecutors’ appeal, passing judgment on 7 April 2005 after a hearing had been held on 6 April 2005. The Supreme Court increased the prison term to three years and the fine to approximately EUR 2,700,000 with one year’s imprisonment in case of default. The decision was served on the applicant’s counsel on 25 April 2005.
35.  The applicant served his prison sentence from 15 April 2005 to 12 October 2007. The applicant petitioned the President of Austria and was pardoned by a decision of 10 March 2008 and the President released him from paying the fine upon a conditional release and three years’ probation.